Homework Help Question & Answers

On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August...

On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and depreciation has been computed on that basis. The company uses the straightline method of depreciation. Following are the assumptions with respect to partial periods: (1) Depreciation is computed for the exact period of time during which the asset is owned. (Use 365 days for the base and record depreciation through March 9, 2019.) (2) Depreciation is computed for the full year on the January 1 balance in the asset account. (3) Depreciation is computed for the full year on the December 31 balance in the asset account. (4) Depreciation for one-half year is charged on plant assets acquired or disposed of during the year. (5) Depreciation is computed on additions from the beginning of the month following acquisition and on disposals to the beginning of the month following disposal. (6) Depreciation is computed for a full period on all assets in use for over one-half year, and no depreciation is charged on assets in use for less than one-half year. (Use 365 days for base.) Briefly evaluate the methods above, considering them from the point of view of basic accounting theory as well as simplicity of application.

0 0
Next > < Previous
ReportAnswer #1

Solution:-

2013-2016 2012 2017 Total $192.000-$16,800 = $175,200 $175,200 12 $14,600 per yr. (S40 per day) (1) $ 5,320 133*1365 of $14,600 2003-2008 Include. (6 X $14,600) 68/365 of $14,600- $87,600 87,600 14,600 87,600 7,300 87,600 $ 2,720 95,640 102,200 102,200 102,200 14,600 7,300 (5) 4/12 of $14,600 2013-2016 Inc. 3/12 of $14,600 4,867 87,600 96,117 87,600 3,650 0 87,600 (11+ 30 + 31 + 30 + 31

The most accurate distribution of cost is given by methods 1 and 5 if it is assumed that straight-line is satisfactory_ Reasonable accuracy is normally given by 2, 3, or 4_ The simplest of the applications are 6, 2, 3, 4, 5, and 1, in about that order Methods 2, 3, and 4 combine reasonable accuracy with simplicity of application

Know the answer?
Add Answer of:
On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August...

    On March 10, 2019, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and depreciation has been computed on that basis. The company uses the straightline method of depreciation. Following are the assumptions with respect to partial periods: (1) Depreciation is computed for the exact period of time during...

  • On March 10, 2022, Lost World Company sells equipment that it purchased for $192,000 on August...

    On March 10, 2022, Lost World Company sells equipment that it purchased for $192,000 on August 20, 2015. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Following are the assumptions with respect to partial periods: 1. Depreciation is computed for the exact period of time during...

  • On March 10, 2019, Sheridan Company sells equipment that it purchased for $216,960 on August 20,...

    On March 10, 2019, Sheridan Company sells equipment that it purchased for $216,960 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $18,984 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2012, for 2019, and the total charge for the period from 2013 to...

  • Exercise 11-15 On March 10, 2019, Flint Company sells equipment that it purchased for $207,360 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a s...

    Exercise 11-15 On March 10, 2019, Flint Company sells equipment that it purchased for $207,360 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $18,144 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation Compute the depreciation charge on this equipment for 2012, for 2019, and the total charge for the period from...

  • On March 10, 2022, Skysong Company sells equipment that it purchased for $203,520 on August 20,...

    On March 10, 2022, Skysong Company sells equipment that it purchased for $203,520 on August 20, 2015. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $17,808 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2015, for 2022, and the total charge for the period from 2016 to...

  • 22. Lost World Company inally estimated that the E11.15 (LO 1,2) (Depreciation for Fractional Periods) On March 10,...

    22. Lost World Company inally estimated that the E11.15 (LO 1,2) (Depreciation for Fractional Periods) On March 10, 2022, Lost World sells equipment that it purchased for $192,000 on August 20, 2015. It was originally estimated equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time preciation has been computed on that basis. The company uses the straight-line method of depreciation Instructions a. Compute the depreciation charge on this equipment...

  • *Exercise 11-15 a On March 10, 2022, Skysong Company sells equipment that it purchased for $203,520...

    *Exercise 11-15 a On March 10, 2022, Skysong Company sells equipment that it purchased for $203,520 on August 20, 2015. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $17,808 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2015, for 2022, and the total charge for the period...

  • Exercise 11-15 a On March 10, 2022, Blue Company sells equipment that it purchased for $234,240...

    Exercise 11-15 a On March 10, 2022, Blue Company sells equipment that it purchased for $234,240 on August 20, 2015. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $20,496 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2015, for 2022, and the total charge for the period...

  • 22. Lost World Company inally estimated that the E11.15 (LO 1,2) (Depreciation for Fractional Periods) On...

    22. Lost World Company inally estimated that the E11.15 (LO 1,2) (Depreciation for Fractional Periods) On March 10, 2022, Lost World sells equipment that it purchased for $192,000 on August 20, 2015. It was originally estimated equipment would have a life of 12 years and a salvage value of $16,800 at the end of that time preciation has been computed on that basis. The company uses the straight-line method of depreciation Instructions a. Compute the depreciation charge on this equipment...

  • On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The...

    On March 31, 2018, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,020,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Useful Life in Years N/A 25 Asset Land Building Machinery Equipment Total Estimated Residual Value N/A none 12% of cost $14,000 Cost $ 110,000 520,000 220,000 170,000 $1.920.000 On June 29, 2019, machinery included in the March 31,...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.